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October 23, 2006
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What's New for Practitioners: 2007 PBGC Flat Rate Premiums
Excerpt: "The 2007 flat premium rates for PBGC's two insurance programs will be $31.00 per participant for the Single-Employer Program and $ 8.00 per participant for the Multiemployer Program." (Pension Benefit Guaranty Corporation)

Text of Complaint Filed Against The Boeing Company Over 401(k) Fees (PDF)
40 pages. Excerpt: "In this action, pursuant to ERISA 502(a), 29 U.S.C. 1132(a), Plaintiffs and Class Representatives . . . on behalf of The Boeing Company Voluntary Investment Plan . . . and similarly situated participants and beneficiaries in the Plan, seek to recover the losses suffered by the Plan and to obtain injunctive and other equitable relief for the Plan from The Boeing Company . . ., the Plan Sponsor, the Employee Benefit Plans Committee . . ., the Plan Administrator . . . ." (American Benefits Council)

Overview: Class Action Lawsuits Target Fee Arrangements (PDF)
3 pages. Excerpt: "Specifically, the complaints target revenue-sharing arrangements between plans, mutual funds (and other investment providers), and plan service providers such as recordkeepers, trustees and third-party administrators ('TPAs'). Some of the cases also allege that plans suffered losses due to improper fee arrangements and the holding of excess cash in company stock funds." (Groom Law Group)

In Retirement Plans, 'Separate Accounts' May Not Be Equal
Excerpt: "[W]hen California state employees were told that their money was moving . . ., they couldn't know what to think or expect. With no ticker symbol, investors can't track the fund in their newspaper or on their preferred Web site (unless that site is run by the Savings Plus Plan). They weren't told if the new accounts have the same managers (in the California case, they do), and they couldn't be certain the separate account will be run parallel to the existing fund." (Boston Herald)

Employees Can Have Say in 401(k) Investment Offerings
Excerpt: "A growing phenomenon in the world of ballooning 401(k) account balances is the employees' sudden interest in the quality of the investments in their plan. Considering the new research on the wisdom of crowds, we can conclude that the consensus of a group of employees with larger account balances should be the final arbiter of what plan features and investments best serve their fellow associates." (The Contra Costa Times; one-time registration required)

Rolling Over Retirement Savings Funds
Excerpt: "Holding more than one 401(k) plan is becoming increasingly common nowadays, as people change jobs more frequently. . . . When you leave a job at which you are entitled to retirement savings, you have a choice: Allow the retirement savings account to stay behind, or move it." (The Washington Post; one-time registration required)

Court Says Missing 401(k) Beneficiary Information Doesn't Invalidate Form
Excerpt: "Rejecting a lower court's finding that a 401(k) participant's beneficiary designation of his stepdaughter was not valid, a federal appellate court has sent the case back for further hearings." (; one-time registration required)

Opinion: The Great Pension Swindle
Excerpt: "Our employer-based savings system is a mess. Everywhere you look, you see mismanagement, malfeasance, and meltdown. Collectively, private-sector pension funds are underfunded to the tune of $450 billion. State and local pension funds are short some $800 billion. That's $1.25 trillion in total!" (Laurence J. Kotlikoff via The Boston Globe)

Tiers Called Way to Keep New Jersey Public Pensions and Curb Taxes
Excerpt: "Lawmakers are pointing to other states as role models for how New Jersey can overhaul its troubled pension system for public employees to cut costs and help reduce property taxes. . . . Twenty-three other states across the country use a tiered system for public employee retirement benefits, according to information compiled by the Office of Legislative Services." (Today's Sunbeam via

Court Denies Retiree Interest on Delayed Distribution
Excerpt: "The US District Court for the Northern District of Georgia has determined that a former IBM Corp. employee who delayed making a timely distribution election following his retirement is not entitled to interest on his pension distribution." (; one-time registration required)

Participant Time-Barred from Fiduciary Claim Against Coca-Cola
Excerpt: "In granting Coca-Cola's motion to dismiss the lawsuit, the court rejected the former employee's claim that the limitation period should have been deferred during the time he was exhausting all administrative remedies for negotiating a better retirement package." (; one-time registration required)

New Law Allows Pension Distributions During Working or Phased Retirement
Excerpt: "New rules. For purposes of the ERISA definition of a pension plan, a distribution from a plan, fund or program will not be treated as made in a form other than retirement income or as a distribution prior to termination of covered employment solely because the distribution is made to an employee who has attained age 62 and who is not separated from employment at the time of the distribution, but instead is in a phased retirement program." (CCH Incorporated)

Consultants Enjoying Perks of Public Pension: Double Role As State Employee Has Many Asking Why
Excerpt: "[Wayne Hamilton, the business administrator in Monroe Township], said extending pension benefits to professional consultants makes sense because they discounted their hourly rates for the public sector. He said providing pension benefits is a 'form of compensation' that helps reduce hourly billings. " (The Star-Ledger via New Jersey On-Line LLC)

Silver Anniversary for the Chile Retirement System
Excerpt: "As Chile celebrates the silver anniversary of its retirement pension system, little attention has been paid to the microeconomic aspects of the 25 year old program, say the authors of a National Bureau of Economic Research (NBER) Working Paper." (National Center for Policy Analysis)

United Kingdom: Update on Anti-Age Discrimination Legislation
Excerpt: "Employers and trustees have until 1 December 2006 to ensure that their pension schemes meet the new anti-age discrimination legislation. In the meantime, the DWP is revisiting some of the exemptions that will apply to pension schemes." (Watson Wyatt Worldwide)

Overview: SEC Finalizes Amendments to Information-Sharing Agreement Requirements for Mutual Funds
Excerpt: "The agreements require intermediaries 1) to provide, at the fund's request, shareholder identity (including taxpayer identification numbers) and transaction information and 2) to carry out enforcement instructions from the fund when the fund's market timing policies are violated." (Hewitt Associates)

ERISA Permits Investment Strategies That Weigh Liabilities in Pension Risk Management
Excerpt: "ERISA permits investment strategies that weigh liabilities in defined benefit plan pension risk management, if certain standards are met, according to an Employee Benefits Security Administration (EBSA) advisory opinion letter." (CCH Pension and Benefits)

Slide Presentation: What Is the Future of Defined Benefit Pensions? (PDF)
21 pages. Presentation by Dallas L. Salisbury, October 9, 2006, at the 52nd Annual Employee Benefits Conference (International Foundation of Employee Benefit Plans)

Discussion: Retirement for Three Hundred Million People?
Excerpt: "According to William Poole, president of the Federal Reserve Bank of St. Louis, 'Changing demographics make it impossible both to maintain that traditional retirement age, with the level of benefits defined in current law, and to maintain the current level of taxation on the working population to support the retirement system.'" (Pension Risk Matters)

Links to Items on Executive Comp, Benefits in General

Misdated Options and Section 409A: A Toxic Mix (PDF)
4 pages. Excerpt: "Any corporation that may have discounted options or SARs should consider whether corrective action should be taken to avoid adverse tax consequences for corporate insiders holding such stock rights. Corporations that are adversely affected by IRS Notice 2006-79 should realize that such corrective action must be taken on or before December 31." (Miller & Chevalier Chartered)

FASB Staff Position No. FAS 123(R)-6: Technical Corrections of FASB Statement No. 123(R) (PDF)
Excerpt: "This FASB Staff Position (FSP) addresses certain technical corrections of FASB Statement No. 123 (revised 2004), Share-Based Payment." (Financial Accounting Standards Board)

Discussion on Judge Ordering Repayment of Millions under Supplemental Executive Retirement Plans
Excerpt: "The Corporate Blog has the latest here on yesterday's decision issued by New York State Justice Ramos in Spitzer v. Grasso. (Access the opinion here.) This opinion is a must-read for every benefits lawyer who drafts or advises clients on nonqualified deferred compensation plans." (Attorney B. Janell Grenier via

The Confusing World of ERISA Preemption
Ms. Grenier comments on recent cases involving ERISA preemption. (Attorney B. Janell Grenier via

New Federal Law Requires Adoption of Additional Fraud and Abuse Policies Effective January 1, 2007
Excerpt: "On February 8, 2006, President Bush signed into law the Deficit Reduction Act of 2005 . . . . To comply with the DRA, covered healthcare entities must establish written policies, applicable to all employees, including management, as well as any contractor or agent of the entity." (Bond, Schoeneck & King, PLLC)

Book Review: The Great Risk Shift-The Assault on American Jobs, Families, Healthcare, and Retirement
Excerpt: "Whatever happened to the good old days of cradle-to-grave security -- of a steady job, a lifetime pension and paid-for health care along the way? This is the question at the heart of 'The Great Risk Shift' . . . by the political scientist Jacob S. Hacker . . . ." (The New York Times; one-time registration required)

Newly Posted Events
(Post Yours!)

Deciphering Business Process Management (BPM) for Health Plan Administration
in California on November 16, 2006
presented by DST Health Solutions

Managing Health Care Costs 2006 Web Summit
in California on November 13, 2006
presented by Healthcare Web Summit

Newly Posted Press Releases
(Post Yours!)

New Study Rates Life Cycle Funds
(Turnstone Advisory Group)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Trust Administrator II or III
for Associated Pension Consultants
in CA

Sales - Retirement Wholesaler
for John Mulligan & Associates
in AZ, CO, GA, IA, ID, IL, IN, KS, KY, MI, MN, MO, MT, ND, NE, NM, OH, OK, SD, TX, UT, WI, WY

Research Analyst
for CitiStreet
in NJ

Defined Contribution Plan Administrator
for Pension Specialists, Inc.
in AZ

ERISA Paralegal
for Hill, Ward & Henderson, P. A.
in FL

Data Project Administrator
for Vanguard
in PA

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